Choosing a tablet in the 7-inch category is now mainly a choice between a $200 Kindle Fire HD, a $200 Nook HD, a $200 Nexus 7… or a $329 iPad mini. To the budget-conscious consumer who is most likely to buy a 7-inch tablet, the first step in the process of elimination seems pretty obvious. Not to Apple’s marketing team, though.

Apple senior VP of marketing Phil Schiller expects throngs of consumers will shill out an extra $129, 65% premium over the standard small-size tablet price because, well, it’s an iPad. Sure, that money gets you an an aluminum case and more internal storage, but some would say those gains are counterbalanced by a lower resolution display, the use of an older SoC, and the possibility of limited availability (at least initially).

In an interview with Reuters, Schiller expressed the company’s logic that because people flocked to buy the lowest-end iPad at $399, they will absolutely gravitate to an iPad priced at $329.

Of course, this argument is subject to criticism. It would be a great argument if the $329 iPad was very similar to the $399 iPad, but in reality you’re paying 18% less money for 30% less tablet. In addition, in the 7-inch tablet market, Apple comes in as a competitor, not an innovator. The Kindle Fire and Nexus brands have done a nice job of dominating this space. Apple’s logic appears to be very blunt in that it expects people to pay more just because it’s an iPad and it has a lot of apps. It clearly does not see any existing tablet as a true rival.

That noted there is little doubt that the new iPad mini will sell out in no time. For the holiday season, it wouldn’t be surprising to see it outsell the more established 7-inch tablets.

An argument like “people will pay more just because it’s an iPad” might sound a bit arrogant, but sometimes within arrogance there is truth. The fact that the big stories about the iPad mini reveal are about how no one expected it would be this expensive, is an issue. But will it actually hurt sales? That remains to be seen.

Reader Comments

lostviking

They’ll buy it at any cost, because we said so.

Hodar

Not this Apple customer. Still holding onto my iPad 1. Works just fine, thank you.

At the smaller size, I will just get the KindleHD for $199. The smaller size makes it more awkward to type, so screw emailing. Just gonna use it for reading and simple time-wasting games. The Kindle will serve this function nicely, and I can either pocket the $129 or buy the Amazon Paperwhite with it.. I honestly believe Apple messed up at this price point. This is NOT the same market as the iPods. iPods are meant for extreme portability (running, jogging). Stuff where they are either stuffed in a pocket or on an armband. This is too large for the iPod niche. IMHO

Adam Barrett

I understand there are people out there that just love their iPads. They love them so much they won’t get rid of iPad ever. Furthermore, if you are already an iOS user you might as well stay as converting over is still a huge pain in the ass. However, if you are just entering the tablet market, and you are open minded at all, iPad Mini is not going to win you over by being simply iOS. Instead you will see there are comparable apps on Android and make the call as to whether it should be a Kindle or a Nexus. Everything else in the space sucks. As for which of those people will choose? Nexus is in Walmart, and Kindle is tied to Amazon. They will both do well depending on where the people making the purchase shop. That is that.

Hodar

If there really is no difference between iOS and Android – why is it that an overwhelming percentage of web traffic in the Tablet area – is Apple? People CAN surf and email with Android – the fact is that they don’t. A lot of these Android tablets wind up sitting in a drawer somewhere.

http://www.facebook.com/cgcousins Corey G Cousins

Apple automatically assumes people will pay what ever they tell them to, what a joke, there is a reason Apples tablet and phone market share has been steadily declining year over year, and this is why.

Android outright owns the 7″ tablet space, and is taking a very large chunk of the 10″ space, I see no good reason to buy a $329 piece of hardware that cannot even keep up with current Android offerings.

Guest

My theory is that people who spend a lot of time on the internet are willing to spend more on an internet capable device than people who only use the internet a little here and there. Those who only use the internet a little bit probably tend toward a cheaper device. It’s just my theory, but I believe this is a big reason why iPad traffic is so much greater than Android tablet traffic, I am assuming this is a per device statistic and not simply that there are so many more iPads. I also think that brand recognition is more important to younger consumers (read heavier users) who would likely gravitate to an Apple product than to older users who use the internet less and base their decision mostly on cost. Again, purely speculation.

http://www.facebook.com/dunlap.gordon Gordon Dunlap

Apple is off their rocker. Jobs didn’t want a 7″ for a reason. He knew the difference between offering a wide variety of quality products and flooding the market with too many choices amounting to little more than “us too”. Well, innovation for Apple now is about repackaging the same stuff in different ways and suing anyone who makes anything that looks remotely similar. I can’t wait for Amazon and Barnes & Nobel to file on Apple. This is going to be down-right entertaining! Thanks Mark, nice review!

lamorpa

…People, …suckers, one of those groups…

lamorpa

The traffic is made up of dopes who watch movies on it, instead of on a large screen. Pretty silly to me.

Derik

So thing is? This is completely true. There are plenty of isheep who will be lining up to buy this crap, just because it has the apple logo on it.

Untouchable

iLovers will always push their bank balance to buy iProducts.

Do you know what? That’s fine by me, because it means more for me :)

Maxx Velocity

Apple: Think Conformist

http://www.facebook.com/bill.cushing2 Bill Cushing

ipad mini without the retina display? just wait six months when they release the ipad mini2 starting at $429

KenJr

With the iPad Mini, you can use, effectively, all the apps (approaching 3,000) that you’re used to using on the iPad, and they display perfectly. There’s a real problem with the way most apps display on an Android tablet (most of those apps were made for smart phones). Those of us who have been using the iPad are spoiled. I think most of us could never bring ourselves to take that long step back just to save a few bucks. This (and a VERY good OS) is why Apple people will buy the iPad Mini, it’s not about brand loyalty.